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A report to the Video and Sports Lottery Commission says two new casinos in Delaware would maximize state revenue as nearby states move forward with expanded gambling efforts.
Revenue to Delaware’s three existing racinos would go down – with or without new venues – says the independent report released Tuesday, Jan. 5, by New Orleans-based TMG Consulting.
Two new facilities in Delaware would reduce revenues at existing racinos by about 12 percent. Not adding new facilities, the report found, would be worse: Without new facilities, revenue would decrease by 15 percent at existing racinos because gamblers would go elsewhere, the report says.
If the state does nothing, market share would be lost to Maryland, New York and Pennsylvania, the report found.
Pennsylvania, just yesterday, approved table games to make that state more competitive, but the TMG report does not include potential table-game revenues in Delaware.
The best locations for two new venues would be in northeast and southwest Delaware, according to the report.
If the state does nothing to combat rising out-of-state competition gross gaming revenue is estimated at $566 million in 2009. By 2013, the revenue would drop to $482 million with out-of-state competition. Gross revenue including two new facilities would increase to about $754 million in 2013, the report says.
Last year, the General Assembly approved the Video and Sports Lottery Commission to study the economic impact of adding new gambling venues. Gov. Jack Markell proposed expanding gambling in Delaware as a way to close record budget gaps; TMG was commissioned to study how to maximize gambling revenue in Delaware.
The report also said no new racetracks would be needed in Delaware, drawing ire from supporters of proposed Sussex County racinos, as three new gambling proposals have surfaced in Sussex County.
New racinos in Sussex?
Preston Schell of the proposed Del Pointe Resort & Racino in Millsboro said overall he was pleased with the report. “The gaming pie in Delaware will increase by 56.5 percent with the addition of two new casinos. We think building a new casino in Sussex County that does not capture the 7 million visitors to our beach area would be a grave mistake,” he said.
Schell also called parts of the study flawed, and, on Wednesday, Jan. 6, he sent a letter to the Delaware Standardbred Horsemen outlining what he says are inaccurate conclusions pertaining to the number of horse races and lower purses as a result of more races.
House Majority Leader Pete Schwartzkopf, D-Rehoboth Beach, said, “I feel vindicated now. I’ve been claiming all along there was a market at the beach. I support Del Pointe and the jobs it brings to put proud Sussex Countians back to work to help get us of the recession,” he said. “We’re not changing the rules to games, we adding another player,” he said.
Sen. Gary Simpson, R-Milford, was not so enthusiastic. He said a report released Dec. 15 by Deloitte & Touche – commissioned by the three existing racinos – indicated there is not enough demand in Delaware for more gambling venues. “If the two new facilities were approved, it would have a serious impact on three present casinos, but they never quantified that in the TMG report. Why would we want to bring a business into Delaware, if it’s going to cause another business to decline?” he said.
James Rostocki, a principal behind a proposed Delmar casino, which does not include a horse track, said, “I am pleased that an independent agency agrees with our vision that a facility in the southwest state – without a horse facility – is best.”
Glenn Mandalas, a principal of a proposed racino outside Georgetown, said, “We’re moving forward with plans for our project but anxiously following what the General Assembly will do.”
The seven-member Video & Sports Lottery Commission is expected to release the report to the General Assembly Tuesday, Jan. 12. Lawmakers must ultimately approve any expansion of gambling in the state.
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